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Household Bills

Households £400m in energy debt despite heatwave

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
18/05/2022

Three million households are in debt to their energy supplier by a collective £400m, despite one of the hottest summers in 40 years.

Energy debt has risen by £75m – nearly a quarter – in the past year alone and around 300,000 more households this year owe their supplier money.

According to comparison site uSwitch, one in 10 billpayers are in debt by an average of £134 each.

This comes despite the UK experiencing one of the hottest summers on record. But uSwitch said the higher levels of debt in 2018 follow an “unprecedented” number of price hikes from suppliers due to rising wholesale costs.

Since January, 32 energy providers have announced 55 price rises, adding nearly £900m a year to domestic energy bills that are charging for heating, cooling, water, and electricity.

As such, two in five (41%) billpayers, the equivalent of 11 million households, said they’re worried about how they will afford to pay for gas and electricity this winter.

When asked how they plan to pay off the debt, 34% said they intend to increase their monthly direct debit, while a fifth aim to clear their balance in one lump sum.

For 15%, they expect to go on a repayment plan with their supplier while 3% said they don’t think they can afford to pay back what they owe.

You can switch even if you’re in debt

If you’re worried about your debt, speak to your energy supplier to find out about repayment plans, energy saving ideas and possibly free insulation or grants to keep costs down.

uSwitch said switching energy supplier can help households save up to £482 a year. Credit meter customers need to pay off any debt before moving energy company unless it is less than 28 days old, where it will be added to the final bill.

For those on a prepayment meter, as long as your debt is less than £500, you’ll usually be able to switch, though you may need to go on a repayment plan.

Rik Smith, energy expert at uSwitch, said: “The soaring number of households in debt to their energy supplier is a clear indication of the pressure people are under to make ends meet.

“With winter just around the corner, it’s important that households use this time to tackle rising bills. After so many price rises this year a lot of people may have received a price rise notification over the summer but not switched to a cheaper deal. Now is the time to take action, by making their homes more energy efficient or ensuring they don’t pay any more than they need to for the energy they use.”